Fdic Wants More From Banks, Thrifts

The Agency Proposes To Boost The Premiums For The Insurance That Protects Customers' Deposits.

May 13, 1992|By Los Angeles Times

WASHINGTON — A divided Federal Deposit Insurance Corp. board voted Tuesday for hefty increases in the premiums paid by banks and thrifts for the insurance funds that protect the deposits of millions of Americans.

The proposed increases, which would take effect Jan. 1, would boost the premium to 28 cents per $100 of deposits, compared with the current 23 cents. The banking industry would pay an additional $1.25 billion a year, and the thrifts another $390 million.

Customers may be forced to pay for more financial services, including increased fees for checking accounts and loans as the banks try to pass along the burden of the higher premiums.

The board also voted to ask for comments on a new system of risk-based premiums for banks and thrifts, with the healthiest financial institutions paying the lowest rates, while shaky companies would pay much more to protect deposits. If the new system were adopted, the government would collect an average of 28 cents, with the strongest institutions paying just 25 cents, while the shakiest ones would pay 31 cents.

Both the general rate increase, and the new risk-adjusted premiums, would need formal approval from the FDIC board after a 60-day comment period.

FDIC chairman William Taylor, arguing that the evidence is overwhelming, said it is essential to rebuild the funds to pay for future financial failures. But he prevailed only on a 3-to-2 vote over the opposition of the chief thrift regulator, director Timothy Ryan of the Office of Thrift Supervisions, and acting Comptroller of the Currency Stephen Steinbrink.

The agencies headed by Ryan and Steinbrink are part of the Department of the Treasury, and the Bush administration has been strongly opposed to any premium increase, arguing that it would hamper the economic recovery.

But Taylor, whose agency is independent of the Department of Treasury, was determined to push through the boost in premiums.